Three Weeks in October – Furloughing the Fight Against Fraud

As the government shutdown dragged into week three, the battle to root out government fraud was stymied on multiple levels. The standoff between the legislative and executive branches even hit the judiciary. Our third branch of government had sufficient resources to avoid closing for the first two weeks. However, as the standoff continued, chief justices from around the country joined an unprecedented public letter pleading for the government to be re-opened to avoid the real constitutional implications of locking court houses. If the shutdown had continued for a few days more, padlocked courthouses would have superheated the toxic vitriol that was already flying around Washington. Dodging that constitutional question does not mean there was no harm done, however.

At the Department of Justice, which enforces the False Claims Act, “civil litigation [was] curtailed or postponed to the extent that this can be done without compromising to a significant degree the safety of human life or the protection of property.” Country-wide, government lawyers working on active cases stayed home. DOJ’s OIG website, said the office was down to 134 employees, or 34 percent of its staff, most of whom were restricted to cases involving “protect[ing] the safety of human life and property in the event of an emergency.” The federal government’s lawyers even went so far as to file motions with some courts to stay all litigation where the government was a party during the duration of the shutdown.

Other government fraud fighting resources were similarly benched. Auditors and investigators – from the Food and Drug Administration to the Internal Revenue Service to the Departments of Health and Human Services and Defense, were all deemed ‘non-essential’ and forced to stay home. The fraud hotlines and websites might have been on, but it’s a pretty safe bet no one was listening. Many offices whose primary role involves investigating fraud were shuttered or hobbling along with limited staff, unable to keep up with the unending feed of fraud complaints. Those committing fraud were alive and well working in the private sector, after all.

The shutdown is now over, or we are in the eye of the hurricane before it starts up again in January. Either way, it’s imperative to assess the damage. At the Department of Health and Human Services where more than 40,000 people were furloughed, the fraud hotline was on but the Centers for Medicare and Medicaid ceased investigating health care fraud and abuse which is estimated to be from $100 billion to $300 billion annually. The Social Security Administration acknowledged that a “backlog could grow dramatically if we experience a lengthy shutdown, and will potentially cause delays long after we return to work.” Assuming a steady stream of tips during the shutdown, federal workers coming back to their jobs following up on Social Security fraud were potentially staring at a stack of more than 6,000 tips of potential fraud on top of what they dropped when they were made to leave their jobs.

The Vice President met some returning federal workers with donuts. Hopefully fraud fighters got something more than a short-lived sugar rush because their efforts to combat fraud were clearly a casualty in this showdown. It will take a lot more than donuts to make up the man hours lost these three weeks in October. If there’s any upside in all of this it is the fact that whistleblowers and their attorneys, who are not government employees, can continue to fight even when the government – quite literally – cannot fight for itself.

Contributing Attorney

Kathleen Scanlan from the law firm of Keller Grover Federal Whistleblower Lawyers